AI ERP: The impact of artificial intelligence on ERP software

Enterprise Resource Planning (ERP) helps corporations to manage key parts of their operations, including accounting, raw material supplies, and productivity. 

Now, AI is set to write a new chapter in ERP, helping your business be more competitive, resilient, and responsive. 

With economic uncertainty continuing and new challenges emerging, your business needs to be ready to engage with and leverage this latest version of ERP. 

Here’s what we’ll cover

How will AI impact ERP systems? 

Simply put, AI-powered ERP can deliver more comprehensive and accurate insights in real time to help you and your teams make better decisions. 

1. Saves you time 

AI and associated technologies such as Machine Learning (ML) and Intelligent Process Automation (IPA) can carry out many repetitive, manual tasks, more quickly, easily, and with fewer errors than humans.

It has huge potential to take the value that you get out of ERP software to the next level. 

ERP needs data and, with AI, data can be collected faster and more accurately.

This automation also frees up time for your teams to do things that only human beings can do like strengthening client relationships, strategic decision-making, or finding new ways to grow or promote a business.

Saving time and reducing the manual admin burden will also make sure you have more to communicate with contractors, suppliers, logistics teams, and even governments and regulators. 

2. Delivers more accurate data 

AI uses large data sets, these are, as the name suggests, vast quantities of data.

The technology can “read” and “learn” from all this data more quickly than human beings and traditional data analysis ever could.  

This learning can be used by ERP systems to offer you deeper insight, something that might take a human hours to manually collate, with the possibility of errors, can be done so in hours or even minutes. 

3. Helps you plan for the future

ERP software can use predictive analytics to help with planning. This ensures your business remains flexible in the face of unforeseen circumstances. 

Here, instead of being backward looking only, AI can use data to predict trends and events in the future, helping you to allocate resources with the help of more accurate forecasts.  

For example, rather than simply waiting for new orders to come in or for suppliers to inform you of availability and price changes you can predict them and forward-plan accordingly.

You can order raw materials to keep ahead of demand as well as making your inventory management leaner, more agile, and responsive. 

Predictive analytics can also be used to identify when a piece of equipment needs to be refurbished or replaced before it breaks down.

It can also predict disruptions in your supply chain, or tell you that you’ll need to order more of a specific raw material because of its predictions for customer demand. 

In addition, AI’s processing of what is known as “unstructured data” means that it can “read” customer orders, vendor invoices, manufacturers’ reports, and other documents, and feed the relevant information into the ERP system in a format that allows it to plan the resources needed by your business. 

4. Interpret queries accurately for the best results

AI-powered ERP will increasingly use Natural Language Processing (NLP) to understand ordinary spoken and written human language.

Your employees will be able to talk directly to your ERP solution, pose a specific question, or tell it to display data in a particular format, and get a response in kind. 

How AI shapes ERP software

ERP systems have traditionally struggled to cope when information is incomplete or incorrect leaving gaps in reporting and inaccurate predictions.  

Maybe a purchase order or invoice doesn’t have all the requisite information, someone has to step in and correct these mistakes manually.  

In other cases, the details might be incorrect—for instance, one of your sales reps might include a clients’ prior address rather than its current one on an order form by accident and your business has to re-send the order to the correct address costing time, materials, and money. 

Using AI-powered ERP software can help with: 

1. Error flagging

AI powered ERP software can identify these omissions and flag them up.

It can even go about sourcing the data that’s missing. It’s also able to automatically correct mistakes by checking details against records held on your systems and elsewhere.

Its ability to detect patterns and then flag anomalies helps with keeping your invoicing accurate and removes rework caused by manual errors. 

2. Predictive analysis

AI-based ERP can improve customer behavior analysis and market research by identifying trends more quickly, specifically, and accurately.

This allows your ERP to flag when to order raw materials, allocate staff and prepare manufacturing for products that your customers require both today and in the future. 

3. Accurate data entry

This technology also removes the need for your teams to input data manually and wait for a response from the system.

AI-driven ERP software will pull this data from a variety of sources, manage it, sort it, and present it in formats that turn it into usable information that’s visible in customizable reports.

4. Insightful reporting

AI is also shaping ERP software by enabling it to identify which of your products and services are most profitable.

New software based on AI can analyze vast amounts of disparate data to spot which of your suppliers and customers is most financially robust.

It can even tell you which team members or departments could be working more efficiently. 

Its ability to look at the landscape and zoom in on the details of your processes can give you a unique understanding of your business finances. 

How will AI impact data handling and business intelligence?

Quality data is the key to AI in ERP. “Garbage in, garbage out” is a phrase coined by George Fuechsel, an IBM programmer and instructor in the 1960s.

It is still used to warn against using error-prone and irrelevant data in analysis.  

Speaking in ERP terms, your business intelligence is only as good as the quantity and quality of data that it operates from.

AI can check, prepare, and integrate your data, ready for processing, reducing time and costs. 

It can also avoid the need for manual analysis, so your teams are not having to look through figures and statistics themselves. 

This not only saves time, but AI is more capable of identifying trends and patterns in data due to its “always on” nature and complex processing than human beings.

This, too, can be fed into your ERP systems to improve your business intelligence capability. 

AI-driven predictive analytics can also enable your business intelligence to be more forward-looking.

Identifying new market opportunities, upcoming trends, and changes over the next few months or even years to your raw material sources and supply chain allows you to be more proactive.  

You can get ahead of any unforeseen situations and even your competitors instead of simply reacting to developments as they happen. 

The AI ERP user experience

AI-based ERP can deliver a better user experience for your teams.

Virtual agents and remote assistants can carry out simple tasks, allowing users to get on with those that are more sophisticated. These might include discussing an issue with colleagues or making nuanced judgements that computer programmes are not capable of. 

AI-powered ERP can include programmable and reactive bots that can answer common questions from internal or external users and guide them on how to use the program itself.  

For example, Co-pilots can provide an increasing amount of support, working alongside your teams to share the burden and carry out those repetitive manual tasks.

These virtual assistants can answer simple queries, write basic emails for you or even summarize a document quickly so you can get those insights to leadership faster. 

AI-generated reports tell the current or future story of your business and its financial and project health quickly and easily.

You can tell the AI to customize the information for different levels of audience, e.g. internal leadership or external investors. 

It can also provide context and background information, helping your teams to fully understand what they’re looking at.

It does this by not only consolidating large amounts of data but by using its Artificial General Intelligence (AGI) analysis to interpret the next steps.  

All of this improves the user experience and leadership’s understanding of your finances in relation to ERP projects and workloads.

Most importantly, the assistance that combining AI with ERP gives users means that they don’t have to be trained data analysts. 

Cloud-based access to this data means that more of your employees can have access essential insights without being tied to locations or paper-based filing. 

AI-based ERP technology can adapt to human interactions making its service more personalized.

The system will learn how a user likes to work, what is of most interest and relevance to them and how they prefer to have data presented to them—improving the overall user experience. 

Third-party solutions

Buying in your AI ERP system from a third party can reduce costs and give you access to future updates and support.

Cloud-based access can make your AI based ERP more agile too—you don’t have to have the system sitting in your office or on one lone computer in your plant. 

Choosing an ERP solution that has AI-schooled experts on hand will provide you with support and advice.

It means that you can feel fully supported to enjoy all the benefits of AI-powered ERP, with a trusted partner who can ensure you continue to receive the latest updates and best possible solutions for your business. 

Final thoughts on AI ERP 

Just as ERP has transformed so many businesses since it became widely available in the 1990s, now ERP itself is set to be transformed by AI in the new millennia. 

Getting on board the right ERP solution now will help your business become more efficient, less costly, and more resilient.